Day-Rate Contractor Remortgaging to Raise Funds for Home Improvements

Our client, a day-rate IT contractor, wanted to remortgage to raise funds to pay for home improvements. He was also coming to the end of a fixed-rate mortgage so wanted to move onto a similar deal, rather than paying his lender’s higher standard variable rate.

Because our client is a day-rate contractor, we needed a lender who would take his day rate into account when calculating how much he could afford to borrow. There was also a potential issue in that he had recently taken a break from work in order to re-train in order to earn a higher daily rate.

Numerous lenders were sourced but this dal required specific criteria and took a lot of research to identify a suitable lender. Most lenders require at least one year’s continuous track record of employment so our client’s break to re-train caused some issues, and we needed a lender who we could discuss the case with in order to explain the situation.

Key requirements: –

• A lender comfortable with our client being a professional day-rate contractor, who was prepared to base the client’s income on that day rate, rather than salary and dividends, when calculating how much they could borrow. • A lender happy to increase the size of the mortgage to cover the cost of the home improvements. • A lender offering a competitive fixed-rate mortgage.

After sourcing the mortgage market, we identified a lender who would agree to our client borrowing the required amount of £622,000. The application process: To support the mortgage application, the day-rate contractor supplied us with evidence of his fixed-term contract and proof of identity. We were delighted to inform our client that the lender had issued a formal mortgage offer for the full amount requested at a competitive fixed rate.

Property value: £850,000 Loan amount: £595,000 LTV: 70% Rate: 1.89% fixed for two years Lender product fee: £1,495 Monthly payment: £2,346